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The U.S. economy is booming, reaching 10 straight years of growth without a recession, and the unemployment rate has fallen to its lowest level in nearly 50 years. The middle-class has benefited greatly from the revitalization of the workforce and an increase in opportunities for employment. Yet, as the growth continues to proliferate throughout the middle class, many are trying to sabotage that growth by increasing the mandated federal minimum wage to $15. For our country to continue this positive economic trend, the minimum wage should not be raised.
Reduced Employee Benefits and Perks
In order to attract quality employees, many business owners offer non-monetary benefits and perks to their employees to keep payroll low and employee morale and motivation high. These benefits and perks can include things like free meals while on the job, flexible work hours and training and development. If the minimum wage is increased to $15, businesses will be forced to spend more money on their employees’ pay, passing on the extra cost to customers. Additionally, employees will likely experience a reduction in tips, overtime, and perks like free food or parking. In general, most large companies prefer to cut costs rather than raise prices if they can, helping not only the employee but the consumer and community as well.
Significant Job Losses for Hourly Workers
According to the Bureau of Labor Statistics 2018 report, the majority of hourly workers are young, under-educated employees in the service industry. As a general rule, service industries operate on a very small profit margin and will be unable to continue staffing hourly workers with a minimum wage increase to $15. Hourly workers re-entering the workforce will have few if any future job prospects. That was most recently evidenced in March 2019 in New York City, which saw its sharpest fall in restaurant employment in 20 years. Therefore, raising the minimum wage could cause significant job losses across the country among hourly workers.
Impaired Growth for Small Business
Small-business owners understand that quality staff is the cornerstone of a successful business. Small-business owners also realize employees are the biggest expense of their business. Because 54 percent of all U.S. sales are conducted by the 28 million small businesses and provide 55 percent of all jobs in the U.S., a raise of the minimum wage to $15 per hour will debilitate the small business profit margin and hinder the advancement of the backbone of the American dream.
While the intentions behind raising the minimum wage to $15 per hour may be good, the reality is that it would hurt the very workers it was meant to help.